Massachusetts PFMLA and the Scope of Employer-Only Liability

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Quick Hits

• The Massachusetts Superior Court held that the PFMLA’s anti-retaliation protections impose obligations only on “employers” as defined in the unemployment insurance statute, and do not extend liability to a corporate employer’s officers, agents, investors, or board members.
• The court distinguished the PFMLA from the Massachusetts Wage Act, which expressly deems corporate officers and agents to be “employers” of the corporation’s employees, language that is absent from the PFMLA.
• The court further rejected an aiding and abetting theory of PFMLA liability, noting that unlike Massachusetts’s anti-discrimination statute, which expressly provides for aiding and abetting liability in discrimination cases, the PFMLA contains no analogous provision, indicating the legislature did not intend to authorize such claims.
• The ruling appears to be one of the first decisions squarely addressing whether individual liability can attach under the PFMLA.

In its decision, Laughlin v. BinStar, Inc., the court also rejected the plaintiff’s attempt to assert PFMLA claims against the individual employee defendants on an aiding and abetting theory, reasoning that the legislature’s decision not to include an aiding and abetting provision, after having expressly provided for aiding and abetting liability in the Commonwealth’s anti-discrimination statute (M.G.L. c. 151B), indicated that it had not intended to provide a cause of action for aiding and abetting a PFMLA violation.

Background

The case arose out of the dissolution of BinStar, Inc., a Delaware-incorporated discount retail company that operated stores in Boston, Saugus, and Avon, Massachusetts. The plaintiff, Jackson Laughlin, co-founded BinStar and served as its president and CEO. Alpaca VC Fund III LP (Alpaca), a New York entity, was an investor in BinStar, and defendants Aubrie Pagano and Ryan Freedman, both affiliates of Alpaca, served on BinStar’s board to represent Alpaca’s interests.

During the summer of 2023, BinStar needed capital. Laughlin alleged that Alpaca exploited this opportunity to restructure BinStar, gaining significant corporate advantages, including acquiring veto power over BinStar’s budgets, debt, equity, mergers, and his role as CEO. By the spring of 2024, BinStar faced financial distress and insolvency, carrying over $1.3 million in debts. Laughlin alleged that Pagano and Freedman rejected a $4 million bridge investment and instead pursued a $1 million alternative on inferior terms.

These events, Laughlin alleged, “precipitated the collapse” of his physical and mental health. From mid-October 2024 through the end of February 2025, Laughlin took a leave of absence under the PFMLA. During his leave, Laughlin remained CEO of BinStar and no successor CEO was appointed. While he was on leave, Pagano and Freedman allegedly sent more than sixty-five messages demanding “CEO-level duties” from Laughlin, including signing dissolution consents, removing a former employee as a director, and giving administrative access to a 401(k) account. On November 22, 2024, BinStar filed for dissolution. That same day, Freedman allegedly disclosed the details of Laughlin’s PFMLA leave to a former employee and his counsel as “a retaliatory act” to undermine Laughlin’s credibility.

Laughlin filed suit and asserted, among other claims, a claim for violation of the PFMLA against Pagano and Freedman, alleging that the barrage of messages during his leave violated the PFMLA. Pagano and Freedman moved to dismiss, arguing that they were not “employers” under the PFMLA and therefore could not be held individually liable.

The Superior Court’s Decision

The court began its analysis of the individual liability issue by examining the text of the PFMLA, observing that the PFMLA makes it “‘unlawful for any employer to retaliate by discharging, firing, suspending, expelling, disciplining …, threatening or in any other manner discriminating against an employee for’” exercising PFMLA leave rights, and provides aggrieved employees with a private right of action for violating that provision. (Emphasis and alteration added by the court). Critically, the court noted, the PFMLA incorporates the definitions of “employer” and “employee” set out in § 1 of M.G.L. c. 151A, the unemployment insurance statute, which defines an “employer” as “any employing unit,” that is, “any individual or type of organization … who or which has or … had one or more individuals performing services for him or it” in Massachusetts.

The court then noted a key distinction between the PFMLA and the Massachusetts Wage Act. Unlike the Massachusetts Wage Act, which expressly provides that “[t]he president and treasurer of a corporation and any officers or agents having the management of such corporation shall be deemed to be the employers of the employees of the corporation,” the PFMLA contains no such language extending liability to individual officers, agents, investors, or board members. “Because no such language is used in Chapter 151A or the PFML statute,” the court ruled, “I decline to import it.” Based on that ruling, the court held that the obligations and prohibitions created by the PFMLA “rest on the employer” and “may not be enforced against investors or board members.”

The court also addressed and rejected Laughlin’s alternative argument that he should be permitted to amend his complaint to assert a claim for aiding and abetting a PFMLA violation. While acknowledging that a corporation may only act through its employees, agents, officers, or directors, the court reasoned that the PFMLA, in contrast to the Massachusetts Wage Act, does not impose liability on those individual actors. The court also noted that the cases cited by Laughlin concerned discrimination claims arising under M.G.L. c. 151B, which expressly provides for aiding and abetting liability: “It shall be an unlawful practice … [f]or any person, whether an employer or an employee or not, to aid, abet, incite, compel or coerce the doing of any of the acts forbidden under this chapter or to attempt to do so.” The absence of similar language in the PFMLA, the court concluded, “indicates the legislature did not intend to provide liability for aiding and abetting a violation of the PFMLA statute.”

Accordingly, the court dismissed with prejudice Laughlin’s PFMLA claim against Pagano and Freedman.

Key Takeaways

The Laughlin decision is significant because it appears to be one of the first rulings to squarely address whether the PFMLA imposes individual liability on persons other than the corporate employer. In holding that it does not, the court applied a straightforward textual analysis, contrasting the PFMLA’s silence on individual liability with the express language found in both the Massachusetts Wage Act and M.G.L. c. 151B. This interpretive framework, relying on the legislature’s deliberate omission of individual liability and aiding and abetting provisions, is likely to be influential in future PFMLA litigation.

For employers, the decision reinforces that PFMLA obligations run to the corporate entity, not to individual officers, directors, or investors. Notably, the court expressly declined to address whether Laughlin had stated a viable PFMLA claim against BinStar itself, noting that the corporate employer had not filed a motion to dismiss that claim. Employers may want to continue to ensure that they comply fully with the PFMLA’s requirements, including its anti-retaliation provision, which continue to apply to employers.

For individual officers, directors, and investors, the decision provides welcome clarity. Although the ruling comes from the Superior Court and is not binding appellate authority, its thorough statutory analysis and its issuance from the Business Litigation Session give it persuasive weight.

The decision also highlights the ongoing patchwork of individual liability standards across Massachusetts employment statutes. The Massachusetts Wage Act expressly extends liability to corporate officers and agents, and M.G.L. c. 151B expressly provides for aiding and abetting liability. The PFMLA, by contrast, contains neither provision.

Ogletree Deakins’ Boston office will continue to monitor developments and will post updates on the Massachusetts and Leaves of Absence blogs as additional information becomes available.

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